Facebook parent Meta on Wednesday reported that its revenue declined for a second consecutive quarter, hurt by falling advertising revenue amid competition from the wildly popular video app TikTok.
The quarter’s weak results raised fresh questions about whether Meta, whose largest Midwest office is in the Loop, plans to spend $10 billion a year on the metaverse.Meta’s disappointing results followed weak earnings reports from Google parent Alphabet Inc. and Microsoft this week. The Menlo Park, California, company earned $4.4 billion, or $1.64 per share, in the three month period that ended Sept. 30. That’s down 52% from, $9.19 billion, or $3.22 per share, in the same period a year earlier.
Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion that analysts had predicted.Some of the company’s investors are concerned Meta is spending too much money and confusing people with its focus on the metaverse, a virtual, mixed and augmented reality concept that few people understand — while it also grapples with a weakening advertising business.
“Meta has drifted into the land of excess — too many people, too many ideas, too little urgency,” wrote Brad Gerstner, the CEO of Meta shareholder Altimeter Capital, earlier this week in a letter to Meta CEO Mark Zuckerberg. “This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”
Meta also forecast weaker-than-expected revenue for the current quarter, further raising worries that the revenue decline is more of a trend than an aberration.
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